An Israeli start-up will start selling software Tuesday, the
latest company to try to convert the success of an open-source software
project into commercial success.

Zend hopes the PHP software for generating Web pages on the
fly will be as good a foundation for its business plan as Linux has been for
Red Hat.

PHP is used so servers can automatically create customized Web pages,
enabling Web site features such as online shopping carts. Tuesday, the
company will begin selling a packaged version of PHP and programming tools
to use it, a caching product to speed up PHP performance and an encryption
product that will let programmers develop proprietary uses of PHP, said Jim
Jagielski, U.S. chief technology officer of the Ramat Gan, Israel-based
company.

The popularity of open-source software, which may be freely downloaded,
scrutinized and changed, has been good to Red Hat, VA Linux Systems, and a
few other companies. Successful initial public offerings have spawned
followers such as Zelerate, which has open-source e-commerce software; Great
Bridge, NuSphere and IBPhoenix, with open-source database software; and
Covalent Technologies, with Web server software.

These companies, though, must take on some industry giants with their own
established technology. In the case of Zend, PHP competes with Microsoft's
Active
Server Pages, Sun Microsystems' Java Server Pages and products
such as Allaire's ColdFusion.

A more likely damper, however, will be lukewarm investor enthusiasm. While
Red Hat and VA went public while Linux and open-source fervor was at its
hottest, the movement has lost
some of its business luster with the general high-tech decline. Some Linux
companies are being forced to consolidate to survive and others
have scrapped their IPO plans.

Zend isn't starting from scratch, though, a major advantage over some
open-source companies. Zend can take advantage of the popularity of Apache,
the No. 1 software package used to send Web pages out to Internet surfers,
according to Netcraft.

While PHP is commonly paired with Apache, Sun's Java technology also fits
through projects such as Tomcat.

Also in Zend's favor is the fact that it employs several PHP gurus,
including cofounders Zeev Suraski and Andi Gutmans, the lead programmers who
recently overhauled PHP during its upgrade from version 3 to 4. And
Jagielski himself is a core Apache developer and the leader of the Apache
Software Foundation's PHP group.

The company, with 28 employees in Israel and five in the United States, plans to add
another 28 positions in Israel and 15 in the United States, Jagielski said.
Expansion will come in programmers and sales staff, he said.

The company is putting as much of its research activities as possible in the
United States--"where the vast majority of our customers are," Jagielski
said--but the bulk of the effort will stay in Israel because of Israeli tax
laws.

The company plans to sell most of its products directly over the Web, but
the company is in distribution discussions with VA, Covalent and Cobalt
Networks (now part of Sun), Jagielski said.

The products that will go on sale Tuesday are:

A caching addition to PHP
that keeps PHP programs in memory instead of requiring a computer to
reconstruct a version each time it's used. The addition, which costs $2,000
per CPU and less in quantity, speeds PHP performance fivefold on average,
Jagielski said.

A $6,000 encryption engine
that lets PHP programs be encoded so their inner workings aren't publicly
available. This can be beneficial to programmers selling PHP software who
don't want to reveal how their programs work, Jagielski said.

A version of PHP Launchpad, a
packaged version of PHP that includes a programming environment to make it
easier to create the programs PHP runs, along with service and support. A
subscription cost of $50 a year for a lower-end product and $70 a month for
higher levels of support.

About the author

Stephen Shankland has been a reporter at CNET since 1998 and covers browsers, Web development, digital photography and new technology. In the past he has been CNET's beat reporter for Google, Yahoo, Linux, open-source software, servers and supercomputers. He has a soft spot in his heart for standards groups and I/O interfaces.
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